Top 20 per cent income earners pay half of total taxes: Fraser Institute

By: Shazia Nazir, Local Journalism Initative

Canada’s top income earners pay more than half of total taxes according to the Fraser Institute.

“Despite the common misperception that top earners don’t pay their ‘fair share’ of taxes, in reality, these households pay a disproportionately large share of the total tax bill,” said Tegan Hill, economist at the Fraser Institute and co-author of Measuring Progressivity in Canada’s Tax System.  The study finds the top 20% of income-earning families pay approximately 54% of the total taxes.

The study defines ‘fairness’ as comparing the share of income earned by one group compared to their share of total taxes paid. Using this  measure, the top 20 percent of income-earning families is the only group to pay a disproportionate share of the total tax burden compared to their share of income earned.

The bottom 20 percent of income-earning families pay 2.3 percent of total taxes.  This is party to the progressivity of Canada’s personal income tax system but earn 5.5 percent of the total family income in Canada.

“The assertion that the top 20 percent of earners in Canada are not paying their fair share is simply not supported by the evidence,” Jake Fuss said.  Fuss is a senior economist at the Fraser Institute, and co-authored the study.